London Stock Exchange eyes swoop for indices firm

London Stock Exchange today confirmed it is in talks to make what could be its largest acquisition since it bought the 50% of FTSE International it did not already own from Pearson three years ago.

Once again the target is a firm that produces financial indices for the international investment community. But Frank Russell is also, in its own right, a fund manager.

Although the LSE declined to expand on a fairly brief announcement, analysts said it could only be looking at the indices part of Russell while probably teaming up with another party which would buy the asset management arm.

Frank Russell was put up for sale by parent Northwestern Mutual earlier this year. There is little published data about the businesses but analysts reckoned it could be worth up to $3 billion (£1.8 billion), with up to $2.4 billion of that accounted for by the indices arm.

The LSE warned that if a deal were to come off — there are several other bidders around — it would need to raise money by issuing shares. That knocked its share price back 2%, with a fall of 36p to 1819p.